Changes to Will Estate Share to beneficiaries

Iains11

Hi, 

please could anyone advise if a Deed Of Variation to a will would be required in the following scenario?:

My late uncle has left a Will with an estate value approx £125k, the estate split as 2 shares to my Mum and 1 share to myself and 1 share to my sister. My Mum has now decided that the estate should be split 3 ways equally. We are at the stage of applying for probate ourselves as executors and the only beneficiaries of the Will. We are all in agreement to the revised split but have been advised a Deed of Variation (costing about £540) would be required by a Solicitor. As the estate is valued less than the IHT threshold is it really required or can we just distribute as agreed amongst ourselves? Thanks

theoretica

If you split the estate according to the will with no deed of variation your mother can then give you and your sister a present. That is legally what would be happening if you don't do any paperwork but just divide the estate as the three of you choose.  The benefit to doing a deed of variation is if your mother's (not your uncle's) estate may need to pay IHT then a deed of variation takes this gift outside her estate if she passes away within the next seven years.

Either an informal gift or a deed of variation could come under deprivation of assets if your mother needs to claim benefits or paid for care in the foreseeable future.

Keep_pedalling

You only really need a DoV if the inheritance would cause your mother’s estate an issue with IHT. If she does need to make one it does not need a solicitor to draw one up she can simply make one of her own. A copy of this should be kept with her will.

https://www.thepfs.org/news-index/articles/the-correct-use-of-deeds-of-variation/82865

getmore4less

Mums  IHT situation has been covered.

Not sure I would bother with a DOV  for a £20.8k gift.

Unless other gifts have already been done the £3k exemption can be used
£6k now(last and this year)
£3k after April then £3k each year after.

Does mum have a living spouse?
Double that.

Iains11

Thank you all for the advice, much appreciated. As Mums IHT would now breach the threshold for her estate we will look into a DoV and just keep our fingers crossed this is not classed as depravation of assets if she needs paid care within the next 7 years. Other option is as stated to do a gift / present as it sounds like it’s likely to have the same net result. 

p00hsticks

Iains11 said:

Thank you all for the advice, much appreciated. As Mums IHT would now breach the threshold for her estate we will look into a DoV and just keep our fingers crossed this is not classed as depravation of assets if she needs paid care within the next 7 years. Other option is as stated to do a gift / present as it sounds like it’s likely to have the same net result. 

If your mother's assets are large enough to exceed the IHT limits then I don't think deprivation of assets is likely to be an issue as she'd be paying for her own care. 

getmore4less

No 7y rule for deprivation of assets.

Have you taken account of residential nil rate band and transferable nil rate band.

With assets in IHT region £20k is fairly easy to distribute to others over relatively short periods.